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Bi-lateral CO2 emissions embodied in Australia–China trade

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  • Jayanthakumaran, Kankesu
  • Liu, Ying

Abstract

This paper quantifies the CO2 emissions embodied in bi-lateral trade between Australia and China using a sectoral input–output model. The results revealed: (1) that China performs lower than Australia in clean technology in the primary, manufacturing, energy sectors due to their overuse of coal and inefficient sectoral production processes, and (2) that China had a 30.94Mt surplus of bi-lateral CO2 emissions in 2010–2011 and (3) overall global emissions were reduced by 20.19Mt through Australia–China trade in 2010–2011. The result indicates that the greater the energy efficient a country among the trading partners the lower will be the overall global CO2 emissions. Global emissions decreased mainly because China consumed Australian primary products rather than producing them. Australia is an energy efficient producer of primary products relative to China. The bilateral trade compositions and trade volume played an important role in lowering global emissions and therefore one can view proposed China Australia Free trade Agreement positively in reducing global emissions. However, for the sustainable development, China should strengthen clean energy use and both countries should adopt measures to create an emission trading scheme in order to avoid protectionism in the form of future border price adjustments.

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  • Jayanthakumaran, Kankesu & Liu, Ying, 2016. "Bi-lateral CO2 emissions embodied in Australia–China trade," Energy Policy, Elsevier, vol. 92(C), pages 205-213.
    • Handle: RePEc:eee:enepol:v:92:y:2016:i:c:p:205-213
    DOI: 10.1016/j.enpol.2016.02.011
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    Cited by:

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    3. Vinicius A. Vale & Fernando S. Perobelli & Ariaster B. Chimeli, 2018. "International trade, pollution, and economic structure: evidence on CO2 emissions for the North and the South," Economic Systems Research, Taylor & Francis Journals, vol. 30(1), pages 1-17, January.
    4. Ding, Tao & Ning, Yadong & Zhang, Yan, 2018. "The contribution of China’s bilateral trade to global carbon emissions in the context of globalization," Structural Change and Economic Dynamics, Elsevier, vol. 46(C), pages 78-88.
    5. Jing-Li Fan & Qian Wang & Shiwei Yu & Yun-Bing Hou & Yi-Ming Wei, 2017. "The evolution of CO2 emissions in international trade for major economies: a perspective from the global supply chain," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 22(8), pages 1229-1248, December.
    6. Tao Ding & Yadong Ning & Yan Zhang, 2017. "The Contribution of China’s Outward Foreign Direct Investment (OFDI) to the Reduction of Global CO 2 Emissions," Sustainability, MDPI, vol. 9(5), pages 1-15, May.
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    8. Huang, Rui & Lv, Guonian, 2021. "The climate economic effect of technology spillover," Energy Policy, Elsevier, vol. 159(C).
    9. Suvajit Banerjee, 2021. "Addressing the carbon emissions embodied in India’s bilateral trade with two eminent Annex-II parties: with input–output and spatial decomposition analysis," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 23(4), pages 5430-5464, April.
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    More about this item

    Keywords

    F18; C67; L51; Keywords:; Carbon leakage; Australia–China bilateral trade; Input–output table;
    All these keywords.

    JEL classification:

    • F18 - International Economics - - Trade - - - Trade and Environment
    • C67 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Input-Output Models
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation

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